Xerxes Atlas Blog

After reading the disappointed reviews for wikinomics, a book that I blogged about earlier, I found some other links that other readers recommended. Namely this book Free - The Future of a Radical Price by Chris Anderson. He was also the author of the Long Tail. A concept which I've read and blogged about but didn't realise there was a book that went with it. Maybe that's the next thing I'll read. The book is very comprehensive and gives a decent job of comparing both sides of the 'Free' coin which was one of the complaints readers had with wikinomics - it was too one sided.

I have just finished listening to the audio and didn't really want to type out what I think is a good summary of the main ideas in the book. A quick google search found me a site that has the abridged version of the book online for you to read or download.

THE TEN PRINCIPLES OF ABUNDANCE THINKING

1. If it’s digital, sooner or later it’s going to be free.

In a competitive market, price falls to the marginal cost. The Internet is the most competitive market the world has ever seen, and the marginal costs of the technologies on which it runs—processing, bandwidth, and storage—get closer and closer to zero every year. Free becomes not just an option but an inevitability. Bits want to be free.

2. Atoms would like to be free, too, but they’re not so pushy about it.

Outside of the digital realm, marginal costs rarely fall to zero. But Free is so psychologically attractive that marketers will always find ways to invoke it by redefining their business to make some things free while selling others. It’s not really free—it’s probably you paying sooner or later—but it’s often compelling all the same. Today, by creatively expanding the definition of their industry, companies from airlines to cars have found ways to make their core product free by selling something else.

3. You can’t stop Free.

In the digital realm you can try to keep Free at bay with laws and locks, but eventually the force of economic gravity will win. What that means is that if the only thing stopping your product from being free is a secret code or a scary warning, you can be sure that there’s someone out there who will defeat it. Take Free back from the pirates, and sell upgrades.

4. You can make money from Free.

People will pay to save time. People will pay to lower risk. People will pay for things they love. People will pay for status. People will pay if you make them (once they’re hooked). There are countless ways to make money around Free (I list fifty of them at the end of the book). Free opens doors, reaching new consumers. It doesn’t mean you can’t charge some of them.

5. Redefine your market.

Ryanair’s competitors were in the airline seat business. It decided to be in the travel business instead. The difference: There are dozens of ways to make money in travel, from car rentals to subsidies from destinations hungry for tourists. The airline made its seats cheap, even free, to make more money around them.

6. Round down.

If the cost of something is heading to zero, Free is just a matter of when, not if. Why not get there first, before someone else does? The first to Free gets attention, and there are always ways to turn that into money. What can you make free today?

7. Sooner or later you will compete with Free.

Whether through cross-subsidies or software, somebody in your business is going to find a way to give away what you charge for. It may not be exactly the same thing, but the price discount of 100 percent may matter more. Your choice: Match that price and sell something else, or ensure that the differences in quality overcome the differences in price.

8. Embrace waste.

If something is becoming too cheap to meter, stop metering it. From having flat fees to no fees, the most innovative companies are those who see which way the pricing trends are going and get ahead of them. “Your voice mail inbox is full” is the death rattle of an industry stuck with a scarcity model in a world of capacity abundance.

9. Free makes other things more valuable.

Every abundance creates a new scarcity. A hundred years ago entertainment was scarce and time plentiful; now it’s the reverse. When one product or service becomes free, value migrates to the next higher layer. Go there.

10. Manage for abundance, not scarcity.

Where resources are scarce, they are also expensive— you have to be careful how you use them. Thus traditional top- down management, which is all about control to avoid expensive mistakes. But when resources are cheap, you don’t have to manage the same way. As business functions become digital, they can also become more in dependent without risk of sinking the mothership. Company culture can shift from “Don’t screw up” to “Fail fast.”

About a week ago most of the Xerxes' Atlas team met for a drinks and nibbles night in Auckland, which was something of a creative summit about the project.  We invited a bunch of smart and talented people were able to pick their brains regarding our project to see what was working, what wasn't and try to find areas that we could expand into.  

While not as many people showed up as we expected, that turned out to be a good thing because we got some really quality feedback and had a great discussion going that might not have been possible with a larger group.  

One important distinction to come out of the meeting was the idea of the difference between product and process, and whether a finished theatrical production was the final product for us, or whether the actual PROCESS of developing a wikimusical is the product.  

Producing and premiering a new musical is a pretty massive undertaking, and it would take a lot of funding to be able to do it properly.  However, what makes this project interesting is not that it's a NEW musical, but that it's an OPEN SOURCE musical, or a WIKIMUSICAL.  I think we came to realise that in order to complete the project we don't have to mount the production ourselves, but develop the tools and resources for other people to produce their own versions of it.

Jade's unique vision is for a musical that can easily be changed and adapted for each production, and where open collaboration is a central part of the creative process.  In focusing just on that aspect, as well as reaching out to groups that might be interested in eventually producing XA, we'll be able to use our resources better and hopefully be a  bit more efficient.

All of this came out of the meeting last week, and while it's changed the parameters of the project a bit, we're very excited about this evolution.  So as far as we're concerned, the meeting was a big success and I'm sure you'll hear more about our new direction in the coming weeks.

Jade: A couple of months ago I put up a post with a video of a presentation of Mike Masnick showcasing his Music Business formula using Trent Reznor of Nine Inch Nails as his case study.This is another great post from Masnick but it gives other examples of lesser known artists it's working for too:

In simplest terms, the model can be defined as:

Connect with Fans (CwF) + Reason to Buy (RtB) = The Business Model

Sound simple? It is, if you understand the basics -- and it can be incredibly lucrative. The problem, of course, is that very few seem to fully understand how this model works. However, let's go through some examples.

Trent Reznor, the man behind the band Nine Inch Nails, has done so many experiments that show how this model works that it's difficult to describe them all. He's become a true leader in showing how this model works in a way that has earned him millions while making fans happy, rather than turning them into the enemy.

Read the full article here: http://techdirt.com/articles/20091119/1634117011.shtml

Photo by Burns!

This one is for all you academics out there. It gives a history of Copyright law and what it was intended for and how it's now not serving it's original purpose.

The director of Sita Sings the Blues, Nina Paley, had to pay $50,000 to use old songs in her animation movie. She then put the movie online for free and turned herself into a free-culture activist. Composer Jaron Lanier was a digital pioneer in the '90s, but in his new book he claims that open-source is destroying creativity and fostering vicious behavior. They join us to debate the pros and cons of free love in art-making.

When I spoke to Elliot Bledsoe from Creative Commons Australia last month he said that we should consider using the Attribution Share-a-like licence. We'd been thinking of using the Attribution Non-Commercial licence - but he argued that we would get the all the benefits of a groundswell of use by not implementing the Non-Commercial clause but the Share-a-like would be enough to stop the major players. From Elliot's blog:

Here in Australia, a staff member at the ABC, one of the national public broadcasters, informed me that it was unlikely that they would ever use Share Alike-licensed material in an ABC product because there is uncertainty what would need to be licensed on the same terms. As they pondered, “Would that segment have to be licensed? Or the whole show?” The potential scope of what must be licensed on the same terms (which allow remixing) makes the Share Alike licences less appealing to mainstream licensees.

In fact, this blog entry talks about a photographer who's photograph licenced under a Attribution licence was picked up by the movie 'Iron Man'. Although the movie didn't need to ask permission as long as the attributed the work to him,  they choose to maintain their risk-adverse clearances process when dealing with permissions to reuse content and wanted to pay him for his work.

Read the whole article here: http://popcult.cc/?p=191

Paley's credo is that profit can be earned from clever merchandising rather than copyrighted sales of an artist's work. Do away with copyrights, which have "far too little perks for an artist today" , she says. "Artists are gagged by the dictates of labels, publishers and distributors"

Check out the full article:

http://timesofindia.indiatimes.com/entertainment/music/The-burden-of-lifting-/articleshow/5355549.cms


Part 1/10 on YouTube: